Aerospace Futures Alliance | BCA Business Strategy and Marketing

Commercial AviationMarket Outlook

Mike BairVice President – Business Strategy and MarketingCommercial AirplanesThe Boeing Company

June 25, 2008

Copyright © 2008 Boeing. All rights reserved. 04/13/23

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

The Boeing Company

World’s leading aerospace company153,000 employees in 48

U.S. states and 70 countries2007 revenue: $65 billionCustomers in more than

90 countriesSecond largest U.S. defense

contractorSuppliers in 100 countriesOne of largest U.S. exporters and

in top twenty U.S. importers

Partnering worldwide for mutual growth and prosperity

Copyright © 2008 Boeing. All rights reserved. 04/13/23

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Boeing Growth Perspective 1996 - 2006

1996 Revenue $23B

CommercialAirplanes

75%

Integrated Defense Systems

25%

Boeing…the global leader in aerospace

CommercialAirplanes

47%

Integrated Defense Systems

53%

2006 Revenue $61.5B

OrganicGrowth

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Boeing Employment In Washington –75,561 Employees

Auburn/Fredrickson7,021

Kent4,008

Everett31,102

Mukiteo712

Renton/Tukwila21,666

Seattle5,782

Seatac1,564

East Side3,478

As of May, 2008

Other62

Moses Lake8

Spokane34

McChord AFB124

Copyright © 2008 Boeing. All rights reserved. 04/13/23

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Boeing Enterprise Supplier Footprint ---- Washington State, By County

5 – 15 suppliers$1250 – 1750k

5 – 15 suppliers$1250 – 1750k

> 5 suppliers> $100k

> 5 suppliers$70 – 80 mil

25-35 suppliers$4500-5000k

5 – 15 suppliers$10 – 12 mil

> 5 suppliers$200-400k

> 5 suppliers> $100k

> 5 suppliers> $100k

> 5 suppliers$200 – 400k

10 - 20 suppliers$3250 – 3750k

15 – 25 suppliers$100 – 300k

0 - 10 suppliers$300 – 500k

1950-2050 suppliers$2700 - 2720 mil

15 - 25 suppliers$100 - 120 mil

> 5 suppliers$500 - 700k

5 - 15 suppliers$1500 – 2000k

> 5 suppliers> $100k

310-330 suppliers$280 - 300 mil

> 5 suppliers> $100k

25 - 35 suppliers$10 – 12 mil

370 - 390 suppliers$750 – 770 mil

40 - 50 suppliers$180 - 200 mil

> 5 suppliers> $100k

60 - 70 suppliers$4000 – 4500k

> 5 suppliers> $700 – 900k

15 - 25 suppliers$1750 – 2250k

5 - 15 suppliers$1250 – 1750k

10 - 20 suppliers$26 – 28 mil

3150 - 3250 Suppliers $4,050 – 4,070m Annual Spend2007

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Airlines Will Need Over 29,300 New Airplanes over the next 20 years

29,370 airplanes

9%

23%

65%

747 and largerTwin-aisleSingle-aisleRegional jets

3%

$3.2T

2007 delivery dollars

43%

9%

46%

2%

Copyright © 2008 Boeing. All rights reserved. 04/13/23

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Market for new airplanes set to become more diversified

Latin America

6%

Middle East5%

Africa2%

C.I.S.3%

Europe24%

Asia-Pacific

31%

North America

29%

Where they’ll go How they’ll operate

Freighters 3% Charter/IT3%

Low Cost18%

IntermediateNetwork

29%

Broad Network47%

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Strong backlog validates Boeing’s product strategy

$255

$174

$124

$70

$271

0

50

100

150

200

250

300

2004 2005 2006 2007 1Q08

Backlog $Backlog $

$ Billions

ModelModel

Single-Aisle31%

Twin-Aisle61%

Large8%

747

777

737

767

787RegionRegion

Americas

Europe

Leasing Leasing & Gov't& Gov't

S.E.Asia

Middle East

& Africa

Asia-Pacific

China & East Asia

Russia

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Boeing and Our Competition

Single-Aisle126-200+ Seats

Large400+ Seats

Twin-Aisle230-399 Seats

SmallSingle-Aisle90-125 Seats

Regional30-89 Seats

Russian (Sukhoi) Superjet 100

Chinese (AVIC1) ARJ21

Updated 04/01/08

Bombardier CSeries

Bombardier CRJ1000

Bombardier CRJ 700/900

Japanese (MHI) MRJ

Bombardier CRJ 200

Embraer 190/195

Embraer 170/175

Embraer ERJ 135/140/145

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Boeing is working with the industry to address important environmental issues facing aviation

Working with industry partnersto research and demonstrate sustainable alternative lowcarbon life cycle fuels

Initiated first comprehensive airplane recycling program — Aircraft Fleet Recycling Association

Promoting and demonstratingair traffic management improvements

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Near term assessment for commercial aviation

Weakening U.S. economy, tightening credit markets impacting passenger traffic growth

Airline operating environment remains challenging– Fuel prices– Environmental pressures– Congestion

Airline profitability under pressure; recent bankruptcies

Liberalization continues

Significant replacement demand

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

BCA Cyclical Workforce History

0

20000

40000

60000

80000

100000

120000

140000

1958

1960

1962

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1968

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1972

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1976

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2008

YEARS

EM

PL

OY

ME

NT

EMPLOYMENT

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Aerospace Futures Alliance | BCA Business Strategy and Marketing

Things to remember

•Long-term market outlook is strong

•Near term challenges persist, but data suggests a longer, stronger delivery up-cycle

•Boeing product strategy is focused on meeting passenger and airline requirements

•Environmental pressures will increase